Energy use, economic growth and CO2 emissions in Africa: does the environmental Kuznets curve hypothesis exist? New evidence from heterogeneous panel under cross-sectional dependence

Although energy supply is not the only factor of the production function, it remains an important driver for any economy despite its negative environmental impacts. This paper examines the determinants of carbon dioxide emissions in a sample of 35 African countries from 1980 to 2016. It uses several econometric methods to ensure robust and reliable findings. Results from Mean group (MG) and Dynamic common correlated effects mean group (DCCEMG) models prove that the environmental degradation in the selected sample is caused mostly by economic growth and non-renewable energy consumption. Moreover, the results confirm that the Environmental Kuznets Curve hypothesis is not significant when consider cross sectional dependence. These finding are contradictive to those obtained from similar studies that used traditional panel estimators. This means that energy consumption and economic growth will continue to increase emissions in the future. Furthermore, the study provides evidence of bidirectional causal relationships between carbon dioxide emissions and economic growth, non-renewable energy consumption and economic growth and between non-renewable energy consumption and carbon dioxide emissions. These findings imply that a hard work must to be done by the African policymakers and a long corrective measure series have to be adopted to ensure more efficient and clean energy.